To pump, or not to pump, that is the question facing OPEC minister when they meet tomorrow in Abu Dhabi.
Here's why I say. It is much ado about nothing.
OK, enough with the Shakespeare.
There are three elements that drive commodity price trends which include Crude Oil.
I call this my "SDS" indicator. Any trader worth their salt uses this formula or some derivative of this formula for their trading.
So let's look at all three today on the eve of OPECs meeting tomorrow. The main decision OPEC is making in Abu Dhabi, is should they raise output by 500,000 barrels a day.
Here's how we see it. At this moment in time supply and demand is pretty much in balance and a bullish or bearish case can be argued either way.
Sentiment on the other hand can only be seen as neutral to leaning on the negative side of the equation.
Here's the scenario as I see it.
OPEC does nothing = prices rally and traders sell into the rally.
OPEC raises output = traders sell.
Sentiment for crude oil in the short-term is decidedly bearish. We expect this sentiment will drive crude prices down into the low eighties by the end of the month.